The present invention relates generally to computerized mortgage qualification, application, approval, underwriting and pricing system and process of a type described in U.S. patent application Ser. No. 09/593,106 assigned to the assignee of the present invention. More particularly, the present invention relates to an improved system and process for determining a “spot price” for a loan (i.e., the price that a lender may expect to receive in the secondary mortgage market when it sells the loan to a secondary mortgage market purchaser). The present invention further relates to facilitating the sale of the loan to the secondary mortgage market purchaser.
When considering the purchase or refinance of a home, potential home buyers consult mortgage lenders such as mortgage companies, savings and loan institutions, banks, credit unions, state and local housing finance agencies or the like to obtain the funds necessary to purchase or refinance their homes. These lenders, who make (originate and fund) mortgage loans directly to home buyers, comprise the “primary mortgage market.”
When a mortgage is made in the primary mortgage market, the lender has several options which include: (i) holding the loan as an investment in its portfolio; (ii) selling the loan to investors in the “secondary mortgage market” (which includes government-sponsored entities, pension funds, insurance companies, securities dealers, financial institutions and various other investors) to replenish its supply of funds; or (iii) packaging the loan with other loans and exchanging them for securities like mortgage backed securities which provide lenders with a liquid asset to hold or sell to the secondary market. By choosing to sell its mortgage loans to the secondary mortgage market, or by selling the mortgage backed securities, lenders get a new supply of funds to make more home mortgage loans, thereby assuring home buyers a continual supply of mortgage credit.
A secondary mortgage market purchaser finances the loans and mortgage backed securities it buys for its own mortgage portfolio by the sale of debt securities in the global capital markets. Working with investment banks, the purchaser sells its debt to both domestic and international investors such as central banks, pension funds, investment funds, commercial banks and insurance companies.
It would be advantageous to provide a system and method which may provide lenders with improved capability to prices sell, and receive funding for loans in the secondary mortgage market. It would further be advantageous to provide a system and method to facilitate the pricing or valuation of financial products such as mortgages and loans. It would further be advantageous to provide a system and method to facilitate the sale and funding of financial products such as mortgages and loans. It would further be advantageous to provide a system and method to allow servicing fees of one or more loans to be optimized or otherwise adjusted.
It would be desirable to provide a system and method or the like of a type disclosed in the present application that includes any one or more of these or other advantageous features.